Speaking at the Jupiter Annual Investment Dinner, the FTSE 250 fund group chief executive addressed several elephants in the room, starting with the firm’s net outflows of £1.3bn in the first quarter.
Slendebroek explained that the group’s total negative flows were a result of the firm diversifying its product line and client base and moving away from its ageing UK business.
“Our business in the UK is mature,” he said. “In the business outside of the UK that we’ve built up over the last five years, typically, our profile is different.”
Jupiter currently has 25 offshore funds, including mirrors of John Chatfeild-Robert’s Jupiter Merlin Balanced and Real Return portfolios and Ariel Bezalel’s Dynamic Bond fund, which was the biggest detractor from positive net flows over the quarter. Meanwhile, it has 38 retail unit trusts or Oeics.
Having fewer offshore products means there is more concentration risk in its international fund flows.
“If we get flowback from one of them it immediately translates into something that is visible for you,” said Slendebroek.
“But I wouldn’t have it any other way,” he continued. “We have built up a tremendous business outside the UK, it drives our growth, it grows two to three times faster than our domestic business but it comes in leaps and bounds.”
The chief executive cautioned that as Jupiter continues diversifying its product and client base, the future flow pattern will continue to be “less predictable”. But he stressed that the firm was more concerned with performance over flows.
“The evidence of success in our company is of course inflows. But do remember that the first objective of this firm is not flows, it’s performance of the underlying business strategy.”
Pay gap problem
When asked about the firm’s 38% gender pay gap, Slendebroek reiterated that this was an industry-wide problem that “can’t be changed overnight” but said that asset managers had faced harsher scrutiny on this issue.
“This is a brutally competitive industry. There aren’t many of you in your profession as journalists that get ranked on a quarterly basis on how well you do. You actually have to be a Premier League football player to get anywhere close to the public exposure that everybody gets.”
While Slendebroek acknowledged Jupiter has a gender pay gap, he stressed “there is nobody in our firm male female or otherwise that gets paid less than the person next to him or her”.
“I promise you in this firm and at any other asset manager, we don’t care what colour you are, gender, race, or other weird behaviours, if you punch out the performance, we love you.”
But he said that more needs to be done to encourage women into the asset management industry.
“The old tradition in our industry is if you’re short on something, you go and nick it from your neighbours. That strategy, in this case, doesn’t work. There are not enough women available. The strategy is to attract more women and more people from minority backgrounds into our industry.
“You can hold me personally accountable for this but it’s not like these numbers, and they’re not pretty, are going to change over the next year or so. But bear with us, we are working very hard on this.”
M&A
As with the previous year’s investment dinner, Slendebroek maintained that Jupiter was not considering a merger with another asset management house.
“We like other people to do M&A and when the crumbs fall off the table we’re happy to pick them up, but we don’t want to participate in that game,” he said.
Above all, he stressed that investment performance would determine the firm’s future.
“Investment performance is what we think about first and foremost; the rest follows. We do not seek consensus and have no house view and evidence of that is on display here tonight. This independence of freedom that we give to everyone who works at Jupiter is also the reason how we attract and retain some really fantastic people.”
